Business

How Apple's Long Product Delay Is Shaking Up Businesses

When the original iPhone was released in 2007, Greg Packer waited on the street for more than 100 hours to ensure that he would be the first in line to get it at Apple's flagship store in New York. Since then, Packer has been at or near the front of the line for at least one Apple launch each year, and he has typically received sponsorship deals from gadget resale sites for doing so.

This year, however, there have been no Apple frenzies for Packer to join, and no sponsors calling for him to wait in line. Apple hasn't held a major product launch event since October, when it unveiled the iPad Mini. Although Apple introduced some new MacBooks and teased software updates at its developers conference in June, the Cupertino, Calif. company has yet to release the kind of new product that motivates customers to flock to the nearest Apple store, and wait in a line that stretches around the block.

What's more, CEO Tim Cook suggested Apple won't release new products until this fall, meaning the company will go nearly a full year without a major launch — its longest product drought in recent memory.

"It's been a radical change because I'd gotten so used to being out there," Packer told Mashable in an interview last month. Packer, a retired highway-maintenance worker, doesn't depend too much on the sponsorships for income; it's more a way of entertaining himself. In lieu of that, he has been occupying his time by going to "sporting events and concerts," and hoping for another launch day to come soon.

Packer isn't the only one eagerly awaiting a big Apple launch. There are countless app developers, casemakers and gadget-resale websites that depend on Apple's product ecosystem to boost sales and marketing opportunities. Now, some of these companies are experiencing some fallout from the lack of a new Apple product.

"Usually when they launch a new iPad or iPhone, we see a huge number of new customers buying apps," said Denys Zhadanov, marketing director at Readdle, which produces iOS apps such as Calendar+ and Scanner Pro. "The lack of the new iPad model this spring had a pretty noticeable effect on our sales."

According to internal numbers (see below) provided to Mashable, Readdle's app sales surged in March and April following the launch of the third generation iPad, but with no new iPad model this year, sales declined throughout the spring.

"There are of course a few reasons for that," Zhadanov said. "But the main one is the absence of the new iPad model, and therefore new customers on the App Store."

Other publishers emphasized the unique opportunity to attract new customers from Apple launches, which has been lost so far this year. As Monica Ray, the executive vice-president of consumer marketing at Condé Nast, told Mashable, "Apple’s new product launches have consistently increased digital sales, as customers are introduced or reintroduced to our brands on new devices and platforms."

Otterbox, a popular case manufacturer for iPhone and iPad, said Apple's slow product rollout could have a negative impact on its sales, as potential customers wait longer to buy new phones — and therefore new cases — or else jump to Android phones, for which it has fewer cases available.

"It might affect us in the short term in terms of monthly or quarterly planning for revenue," said Nick Allison, a market-research analyst for Otterbox. "You might have a bit of a lull if people remain seriously loyal to Apple, and wait on a new device. Most of case sales are tied to new devices."

Beyond hard sales, Otterbox has also experienced a missed marketing opportunity. In previous years, the company has set up shop outside Apple stores on launch days, and handed out swag to those waiting in line.

"The Apple launches are where we go all out just because they are easy avenues for us to get involved with," said Kelly Richardson, an Otterbox spokesperson. "I think the biggest benefit to us of being part of those launch events was sharing that excitement with consumers. We want to be part of that conversation."

As it happens, Otterbox decided to participate in a Samsung launch event this year for the first time, which Richardson described as being part of the company's goal to "expand our reach" and "get involved in other launch events" besides Apple's — although she said she fully expects to take part in the next Apple launch event, whenever that may be.

Readdle, too, is considering building out some of its apps for Android to boost sales. Even Packer, the perennial line-waiter, is now willing to take a sponsorship deal to wait in line for a different company's launch event. "I listen to all offers," he said.

Still, there aren't many — if any — tech-product launches that truly rival the hype and demand surrounding Apple events.

"Apple has just mastered the art of creating buzz around their launches," said Israel Ganot, co-founder and CEO of Gazelle, a gadget-resale website that frequently takes part in Apple launch events to market its service, including sponsoring those at the front of the line like Packer.

Ganot said he expects to ramp up marketing during Samsung launch events, as the company's products "become more meaningful for re-commerce," but as of right now, Samsung launches don't offer the same sales benefit as Apple launches.

"Until Samsung starts to do a good job of introducing products and creating the same buzz that Apple does, [it] won't have the same impact of doing it with Apple," Ganot told Mashable.

Even so, Ganot isn't lamenting the current Apple product-rollout schedule too much. He compares it to the Jewish holiday of Hanukkah.

"It's no different. It comes once a year," he said. "Do I miss it? Sure, but you just got to get used to it."

Mashable
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